Supply Chain: Coolcargo and Coffee Business

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Table of Contents

Introduction
Case Study – Coolcargo
Case Study – Coffee
Comparison
Conclusion
References

Introduction

The supply chain describes the whole path of the materials which they pass from the very beginning to the ending point, which is the retailer or the customer. In practice, the majority of organizations receive the materials from a list of different suppliers and transfer production to different consumers. Therefore, having passed through various levels of suppliers and through various supply chains, initial materials can be combined together in the factory, pass through the organization, and on the exit, products occur which then, moving through various levels of consumers, can disperse again.

Separate supply chains sometimes connect with each other to satisfy the demands of different consumers, and sometimes the general supply chain is divided into separate branches when the same product travels to different users using various ways. As a result, the picture of supply chains becomes more and more complex, especially if the organization produces a set of different products.

Case Study – Coolcargo

Each product has its own supply chain, and as a result, the general number of different configurations of such chains is huge, and at that, some of them are very short and simple, and others complex and long.

In the case study of Coolcargo, a logistics company providing transportation for asparagus from Thailand, the difficulties lied in providing necessary temperature conditions for asparagus during transportation within the supply chain. Coolcargo managed to overcome this obstacle by introducing specific conditions during transportations which increased the cost for the consumers. In that sense, the supplier made a trade-off, where the price was traded for asparagus’ safety and quality. Considering the case of the short supply chain in ‘Asparagus from Thailand’, this paper analyzes a similar in length but different in challenges supply chain, i.e. the supply chain of coffee.

Case Study – Coffee

The coffee business is a very diverse one in terms of scale. The main challenges can be met in the intermediary chains that might occur before transport and logistics take the lead. The dilemma is in the fact that many sorts of high-quality coffee come from countries with weakly developed supply networks.

For example, in Yemen, a country popular for its coffee, “most of the coffee bean’s quality attributes are determined at the farm level it is critical to work together with the farmer and the necessary middlemen. So, in order to improve exports, it is vital to address every step of the chain.” (“MOVING YEMEN COFFEE FORWARD,” 2005, p. 11)

In that sense, the logistics cannot be definite about the point after which they take control of the shipment. An additional sign of warning can be apparent at the stage of controlling the quality of the product. One of the stages in supply chains is roasting. This is an optional stage as some companies prefer to buy directly from their roasting companies, others buy the coffee roasted locally. In Yemen for example, “Most exporters dealing with collectors reported serious quality problems with large percentages of foreign matter, discolored or broken beans from milling and high moisture content.” (McCarth, 2007)

Comparison

Comparing to Asparagus, the existent problem was the storage during transportation, where the company handled the product directly from the farm into packaging and quality assurance. In the coffee industry “Between 50 and 70% of the global coffee supply came from small-scale farms by 2001” (Stanley, 2002), and in countries such as Ethiopia, “after the cherry is harvested, it is sold to wholesalers or collectors or to the cooperative.” (“The Coffee Supply Chain – Fair Trade vs. Non-Fair Trade,” 2008)

Conclusion

Summarizing the difficulties of the Coffee supply chain, it could be said that in order for the logistics to effectively operate, especially with small-scale suppliers, there is a need for implementing the conceptual network. This network should be combined with checkpoints on various stages of the supply chain, in order for the product to have minimum interference, and systematize this network as much as possible.

References

(2005) MOVING YEMEN COFFEE FORWARD. USAID.

(2007) Exploring the Strategic and Operational Tradeoffs in Internet and Physical Store Retailing. Knowledge@Emory.

(2008) The Coffee Supply Chain – Fair Trade vs. Non-Fair Trade. Overseas Cooperative Development Council.

CHARLOTTE FILMS LTD (2008) ‘Asparagus from Thailand’: Logistics in the international food industry Laureate Education.

CHOPRA, S. & MEINDL, P. (2007) Supply chain management: strategy, planning, and operation, Upper Saddle River, N.J., Prentice Hall.

MCCARTH, S. P. (2007) Smallholder Specialty Coffee Compliance: Ethiopia and Yemen Case Studies. Trade Standards.

STANLEY, A. (2002) Starbucks Coffee Company. Dartmouth College.

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